Fewer Medicare Drug Plans Offer ‘Meaningful’ Coverage in Doughnut Hole

In 13 states in 2007, no insurer will offer Medicare prescription drug plans that include "meaningful" coverage during the so-called "doughnut hole" coverage gap of the Medicare prescription drug benefit -- an increase from four states in 2006 -- according to a report released Wednesday by Families USA, the Washington Post reports (Lee, Washington Post, 11/2).

Plans analyzed for the report were considered to have meaningful coverage during the doughnut hole if they paid for the 25 drugs most commonly prescribed to seniors in 2004 in a pharmaceutical assistance program in Pennsylvania (Carey, CQ HealthBeat, 11/1).

Under the 2006 doughnut hole provision of the standard prescription drug benefit, beneficiaries are responsible for 100% of prescription drug costs between $2,250 and $5,100. For 2007, beneficiaries will be responsible for 100% of prescription drug costs between $2,400 and $5,451.25 (California Healthline, 10/16).

According to the report, 18 of the 25 most commonly prescribed drugs do not have generic equivalents and therefore are not covered during the doughnut hole under most Medicare drug plans, which for 2007 typically cover only generics within the gap. For plans that offer meaningful coverage, average monthly premiums for 2007 will increase 87.4% to $103.20, compared with $55.08 in 2006, the report found (CQ HealthBeat, 11/1).

Nationwide, 38 of the 2,844 available plans for the 2007 plan year will offer meaningful coverage, compared with 55 of 2,182 plans offered for the 2006 plan year, according to the report (Sorkin, St. Louis Post-Dispatch, 11/2).

The report also found that the number of beneficiaries who do not have access to meaningful coverage will increase from 375,000 this year to 6.6 million in 2007. That finding is based on the number of beneficiaries with prescription drug coverage as of June 2006.

It does not include beneficiaries who qualify for a low-income subsidy that covers drug costs during the doughnut hole or beneficiaries known as dual eligibles -- those enrolled in both Medicare and Medicaid -- whose prescription drug coverage was transferred to Medicare under the drug benefit (CQ HealthBeat, 11/1).

For plans that offer any doughnut hole coverage, average monthly premiums will decrease from $48.40 this year to $47.40 next year, according to the report (Washington Post, 11/2).